The Competition Commission of India (CCI) has released a study examining AI’s significant impact on India’s market dynamics, competition, and regulatory framework.
Global and Indian AI Market Growth
- Global: AI market is projected to rise 25-fold from USD 189 billion(2023) to USD 4.8 trillion(2033)(UNCTAD)
- India: AI market is expected to grow 25–35% annually to reach USD 17–22 billion by 2027 (BCG–NASSCOM)
Primary Competition Issues in the AI Era
- Algorithmic Unilateral Conduct (Abuse of Dominance): Big firms may use algorithms for self-preferencing, predatory pricing.
- Moreover, control of vast, high-quality datasets and expensive computational infrastructure by a few large firms entrenches their market power and stifles competition from new entrants.
- Pricing Practices and Discrimination: AI-driven pricing (such as dynamic, personalized and targeted pricing) leverages advanced analytics to tailor prices based on a consumer's estimated willingness to pay. It may raise concerns about the potential exploitation of vulnerable segments
- Algorithmic Coordinated Conduct (Collusion): E.g. AI algorithms can independently coordinate pricing, market allocation, or bidding without human agreement through self-learning methods. This will make detection of market collusion tougher.
Initiatives to be taken by Competition Commission of India (CCI)
- Regulatory Capacity Building: Strengthen its technical capabilities and infrastructure, and establish a Think Tank of experts on digital markets and AI.
- Inter-regulatory Coordination: Promote coordination with other government departments and regulators, potentially through Memoranda of Understanding (MoUs).
- International Cooperation: Engage with international competition authorities and multilateral platforms like the OECD to align on enforcement strategies.
International Regulatory Approaches
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